Financials

Report by Galliano's Financials Research

The shares have re-rated but remain attractive given Rakuten Bank's strong balance sheet and low-cost base with undemanding valuations compared to its Asian digital banking peers. The bank is well positioned to benefit from the negative interest rate policy exit in Japan, with its low LDR, high cash balances, growing loan book and healthy capital ratio. It continues to leverage off the Rakuten Group eco-system, as a low-cost source of new customers; nearly a third of clients use Rakuten Bank as their primary Japanese bank.

Financials

Report by Galliano's Financials Research

IPO adds an attractively valued Japanese neobank to the globally listed neobank universe; furthermore, the Rakuten Group ecosystem is a powerful tool for customer acquisition and retention. On efficiency metrics, Victor Galliano shows how Rakuten Bank scores well vs. its key domestic peers as well as global comparables. At the announced issue price of ¥1,400, Rakuten Bank’s PBV ratio implies an attractive 25% discount to its core Japanese peer SBI Sumishin Net Bank, for similar ROE.